Question 1

How does this retirement calculator work?

Accepted Answer

It grows your current savings plus your monthly contributions month by month at the return you enter, until your retirement age. At retirement it applies a safe withdrawal rate to estimate the monthly income the balance can support, then compares that to your target monthly spending.

Question 2

What return rate should I use?

Accepted Answer

A diversified stock-and-bond portfolio has historically returned roughly 6% to 8% a year before inflation. If you want the result in today's dollars, subtract inflation and use a real return of about 4% to 5%.

Question 3

What is a safe withdrawal rate?

Accepted Answer

It's the share of your nest egg you can withdraw each year and reasonably expect the money to last. The classic benchmark is 4% a year; retiring early or expecting a long retirement argues for 3% to 3.5%.

Question 4

Should I include Social Security or a pension?

Accepted Answer

Yes — enter the expected monthly amount in the other-income field. It reduces how much your portfolio has to cover, which usually shrinks the gap substantially.

Question 5

How much should I save each month?

Accepted Answer

A common target is 15% of gross income, including any employer match. If the calculator shows a shortfall, the fastest levers are raising the contribution, delaying retirement a year or two, and cutting fixed monthly expenses.

Question 6

Does it account for taxes and inflation?

Accepted Answer

Not directly. Use a real (after-inflation) return to keep everything in today's dollars, and remember that withdrawals from traditional 401(k) and IRA accounts are taxable as income.

Retirement Calculator

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Retirement calculator questions